1. The War on Poverty’s Human Capital Programs: K-12 Education
Elizabeth Cascio, Dartmouth
Sarah Reber, UCLA
June 2012

2. Elementary and Secondary Education Act
Signed April 11, 1965
Title I: Federal aid to fund programs for poor, educationally deprived children
Directed to poor school districts
$1 billion in ($7b, 2009$)
Doubled federal aid for elementary/secondary education
Per-pupil grants to districts ↑ linearly in child poverty rate

3. The Title I Program
Restricted block grant from the federal government to local school districts
Targeted good is educational services for poor children
Initially, very little regulation of use of funds
Over time, became highly regulated
Most educators now think of Title I as related to particular educational interventions (pull-out programs), schools and students
Evaluations of program consistent with this

4. Federal Grants in a Federalist System
Effects of Title I extended beyond grant-making
TI receipt initially tied to desegregation
Strengthened the hand of the Courts
Consider desegregation-related benefits part of the legacy of TI
TI receipt tied to accountability
Experience of TI influenced design of state programs

5. Title I Evaluation Studies
Federally mandated evaluations
Compare students participating in “Title I programs” to some comparison groups
Generally find Title I not so effective
Difficult to handle selection problem
Gives benefits of Title I overall only if
No Crowd-Out: Services received by treated students are new services
No Spillovers: Non-participating students not affected
Good reason to believe these don’t hold

6. Economists’ Approach Worry about all kinds of crowd out
Who can crowd out?
State governments
Local school districts
Schools
Where might the money go?
Educational services for ineligible kids/schools
Ineligible educational expenditure (e.g. capital)
Private consumption (lower taxes)
Funds may be nominally used for intended purposes but still not increase ed services for poor children
Lots of anecdotal evidence of nominal mis-use of funds

7. Fiscal Federalism Studies
Feldstein (1978)
Gordon (2004)
Cascio, Gordon, and Reber (2012)
Range of estimates, but all find evidence of economically significant crowd-out.
What is the incidence?
CGR find suggestive evidence of improvements in ed attainment for Southern whites

8. Summary of the Literature
Important to consider crowd-out!
Few credible studies of Title I programs much less the program as a whole
Desegregation appears to have benefitted blacks  TI like played some role
Many other actors and policies also important
A lot we don’t know

9. School Spending and Attainment: A Long View
How have the relationships among educational spending, educational attainment, poverty and income changed over time?
Use state-level data from the 1950s to 2000s.
Digest of Education Statistics
Census/ACS

10. Summary
Spending incredibly unequal across states and strongly negatively correlated with poverty
No “South” effect  South is just poor
Would have needed a much larger program to equalize
Poverty less predictive and slope less steep over time
Greater role for income
Ed attainment gaps between high and low poverty states narrowing over time
HS: Strong trend over whole period
College Attendance: Consistent with role for TI